CFPB Will Seek More Mortgage Data

The Consumer Financial Protection Bureau is considering requiring credit unions and other mortgage lenders to provide even more data about their housing finance loans and borrowers.

In remarks prepared for a Feb. 7 press call, CFPB Director Richard Cordray noted the Dodd-Frank Financial Reform Act increased the information lenders must report to comply with the Home Mortgage Disclosure Act. But he added that the agency was considering asking for more.

Currently, mortgage lenders have to report information such as the type of housing loan made, the census tract where the property is located and the borrower's race and ethnicity.

But the Dodd-Frank Act also mandates lenders report total points and fees of loans, their term, the length of time any teaser rates apply and the borrowers’ age and credit score, Cordray said.

Further in addition to the legislatively mandated additions, Cordray said the CFPB is considering requiring lenders to supply other information as well.

“We are considering asking financial institutions to include more underwriting and pricing information, such as an applicant's debt-to-income ratio, the interest rate, the total origination charges, and the total discount points of the loan,” Cordray wrote in his prepared remarks.

“This will help regulators spot troublesome trends in mortgage markets around the country,” he added.

Cordray also reported the agency is working on ways it says it might be able streamline the tasks of reporting all this housing finance data, in particular by using existing reporting platforms where ever possible.

“Approximately 70% of all loans eventually sold to the GSEs use the Uniform Loan Delivery Dataset of the Mortgage Industry Standards Maintenance Organization data standards for residential mortgages,” Cordray wrote.

“Where possible, alignment of the HMDA data requirements to this open and free standard already being used by most lenders provides an opportunity to improve market efficiency, market understanding, and market oversight.”

The CFPB is also considering “leveling the playing field,” Cordray wrote, about which lenders have to report. Currently, many financial institution lenders have to report whether or not they make any loans at all for a year, but many non-financial institution lenders only have to report if they make more than 100 loans.

The agency is considering making the standards uniform so that both financial institution lenders and non-financial institution lenders will have to report if they make more than 25 loans per year.

Cordray said the agency is only at the beginning of the rule making process for the new regulations and is convening a Small Business Review Panel to kick it off.

“We do this both to follow the law but also to listen to community banks, credit unions and other small entities that may be affected by our rules,” Cordray wrote. “We also will engage with other stakeholders about what we are considering proposing.

“We will be seeking feedback from industry and consumer groups that will be affected by these changes to the HMDA process. Sometime later this year, we will put out a proposed rule seeking broader public feedback through the standard notice-and-comment rulemaking process.”

CUNA and NAFCU indicated they understood the CFPB would need to collect the data mandated by the financial reform act, but both expressed wariness about credit unions having to spend additional time and money reporting other information that the law does not require.

“Credit unions want their members to have information about their products, but, don't need any new regulations above what is required by the Dodd-Frank Act to ensure that happens,” CUNA Deputy General Counsel Mary Dunn said. “We are pleased that one of the tools the CFPB announced would rely on information that is already available.”

Carrie Hunt, senior vice president for regulatory affairs at NAFCU, said the association was pleased that some credit unions will likely be included in the small business review panel but expressed reservation how well the agency understood what it takes for credit unions to comply with data mandates.

“It's not clear how well the CFBP understands what credit unions have to do to comply,” Hunt said, adding it was hard to tell how many credit unions use the sorts of reporting platforms that the agency wants to adopt for its own reporting.